Oregon Paid Sick Leave Law

Recently, Oregon joined a growing number of cities and states adopting laws which provide for sick leave for employees. The new law which becomes effective on January 1, 2016 will apply to substantially all Oregon employers. However, only employers with ten or more employees will be required to provide paid sick leave. Employers with nine or fewer employees will be required to provide sick leave but it may be unpaid.

A brief summary of the new law follows. Suffice it to say, the summary does not fill in all of the details. We’re happy to answer your more specific questions for you.

The effective date for the new law is January 1, 2016. Oregon’s Bureau of Labor and Industries is charged with drafting regulations to support the new law and enforcing it.

For Portland based employers, the state law is very similar although not identical to the Portland Sick Leave Ordinance. For example, the Portland ordinance applies to all employers and their Portland based employees. One key difference between the Portland ordinance and the Oregon law: for Portland employers, the paid sick leave requirement is triggered with six employees and not 10. For Portland based employers, paid sick leave will continue to be triggered with six or more employees after January 1, 2016.

Covered employees under the Oregon law include: individuals paid on a piece rate basis or similar; individuals paid on an hourly, salaried or commission basis; individuals subject to withholding; and home care workers.

Covered employees do not include: employees who receive paid sick time under federal law; independent contractors; participants in a work training program or a work study program; railroad workers exempted under the federal Railroad Unemployment Insurance Act; and an individual employed by that individual’s parent, spouse or child.

Paid sick time means time off provided to an employee by an employer employing 10 or more employees (six or more if you are in Portland) for the purposes described below that is compensated at the employee’s regular rate of pay. Sick time means time off during which an employee is permitted to be absent from work for the purposes described below.

Employers shall implement a sick leave policy that accrues sick time at the rate of at least one hour for every 30 hours the employee works or 1 1/3 hour for every 40 hours the employee works. As noted earlier, this will be paid time off if the employer employs 10 or more employees (six or more in Portland) and unpaid time off if the employer employees nine or fewer employees. Employers employing nine or fewer employees may choose to make the sick time be paid sick time.

As an alternative to accruing hours, employers may choose to “front load” sick time by assigning and making available a certain number of hours of sick time to an employee as soon as the employee becomes eligible to use sick time and on the first day of the immediately subsequent year without regard to an accrual rate. If the front loaded amount for employees is at least 40 hours in a calendar year, no accrual record keeping is required.

Employers may adopt a policy that: (1) limits an employee from accruing more than 80 hours of sick time; (2) prevents an employee from using more than 40 hours of sick time in a year; or (3) allows an employee to carry over unused sick leave so long as the employer pays the employee for all unused paid sick time provided that the employer employs 10 or more employees; the employer and employee mutually agree; and the employee is credited with an amount of paid sick time that meets the requirements of the new law (a Front Loaded plan).

The new law does not require an employer to compensate an employee for accrued unused sick time upon the employee’s termination, resignation, retirement or other separation from employment

Sick time may be used by an employee for an employee or family member’s:

mental or physical illness, injury or health condition, need for medical diagnosis, care or treatment of a mental or physical illness, injury or health condition or need for preventive medical care;

for any purpose allowed under the Oregon Family Leave Law; and

for purposes related to seeking legal or law enforcement assistance relating to domestic violence, harassment, sexual assault or stalking; to seek medical treatment and recover from injuries caused by domestic violence, sexual assault, harassment or stalking; to obtain or assist a minor child or dependent obtain counseling related to an experience of domestic violence, harassment, sexual assault or stalking; to obtain services from a victim services provider for the eligible employee or the employee’s minor child or dependent or in the event of a declared public health emergency.

Employees may be allowed to donate accrued sick time to another employee if the employer has a policy that allows donated sick time.

The new law contains provisions relating to how leave may be taken (minimum time requirements, advance notice where possible, etc.).

Oregon’s law provides that an employer may require that an employee provide verification from a health care provider if an employee proposes to take more than three consecutive workdays of sick time. However, verification may not be required where the reasons for the sick time relate to domestic violence, sexual assault, harassment or stalking.

Verification may also be sought whenever an employer suspects an employee of a pattern of abuse, such as repeated use of unscheduled sick time on or adjacent to weekends, holidays, vacation days or paydays. This will be an area where employers will need to tread lightly at least until regulations or case law help better define what the term “pattern of abuse” is and isn’t.

All employers will be required to post a notice of the new law at the workplace. The form of the notice will be forthcoming in the next few months.

As noted earlier, this information is intended as a summary. There are other provisions which may apply to your business (dealing with rehires or cashing out unused sick leave rather than allowing it to carry over, for example). In addition, there are a number of other federal and state laws which could impact your business and the interpretation of Oregon’s new law, including, without limitation federal and state versions of the Americans with Disabilities Act.

We also expect that the Oregon Bureau of Labor and Industries (BOLI) will provide additional guidance in the coming months as it drafts regulations in support of the new law.
We recommend that all employers plan to update their Employee Handbooks to reflect this new law. While doing so, it’s always a good idea to see if there is other updating which ought to be done to make certain that your Handbook is current.

Use this summary as a heads up and a guide. The new law is effective on January 1, 2016, so you have time to plan for it. If you have questions or need assistance updating your policy manual, we are happy to help you.